No softmod would cause a hardware failure. If the drive is clicking, it could possibly be that the drive is simply going bad. If you followed the steps correctly, there is absolutely no reason the games should not work. And if you tried them on another Wii and they worked fine, you know the disk is good.
My little brothers-in-law have a Wii and they're only 5 and 8 years of age. They don't take care of stuff at all. And their Wii does something similar. It plays retail games fine (most of the time), but burned games gives it trouble. Every now and then if you clean the disk really well it will play it for a good 5 minutes or so and then error out. The lens is probably dirty, but I don't feel like messing with it because they have absolutely no respect for the things they have and it will just end up broken again. [/rant]
Anywho.. not to say your friend doesn't take care of his stuff, but maybe try to clean the lens or look for some of those lens fixing mods. Sounds like the Wii is hacked fine, but you can make sure by trying to load some games from USB and see if they work.